Tax package already affecting spending power – Phillips
Opposition spokesman on finance, Dr Peter Phillips, says it’s now clear the Government was wrong when it said the tax package it imposed in May would not significantly impact inflation.
The government imposed more than $13 billion in taxes to fund the revenue shortfall arising from the increase in the personal income tax threshold to a little over a million dollars.
Critics had argued that the tax package would negatively affect inflation, and in turn impact the spending power of Jamaicans.
However, both Finance Minister Audley Shaw and Bank of Jamaica Governor, Brian Wynter, denied the assertion.
Shaw said technocrats had advised him that the impact on inflation would be zero point two per cent over the course of the financial year.
However, Phillips says a month after the tax package came into effect, the consumer price index (CPI), which is used to calculate inflation, was already trending upwards.
He told a meeting in Mocho, Clarendon, last night, that figures from the Statistical Institute of Jamaica show that the CPI for June was 0.9 per cent higher than the figure for May.